Helping Employees Adjust Tax Withholdings After the Trump Tax Plan

If you’re a small-business employer, your employees may need a bit of help determining how much they should have withheld from their checks to better ensure they don’t end up owing the IRS come tax season. You may be a bit confused about how to help them with their W-4 forms, but gaining a few tips can help ensure everyone is all smiles when it’s time to file taxes.

Offer Information, But Nothing Else

One of the most important takeaways with this topic is that you cannot advise your employees on how much they should have withheld from their checks. You can (and should) most certainly inform them of how the W-4 form and tax withholding process works, but that’s all you’re legally allowed to do. You do not have the legal right to fill out an employee’s W-4 form.

How much an employee should have withheld depends on the number of dependents she or he can claim, current marital status, and which tax credits she or he qualifies for. If an employee has questions you don’t have the answers to, reach out to an accountant or payroll professional.

Don’t Forget About the Most Recent Tax Laws

Something else you and your employees need to be aware of while filling out W-4 forms is the newest tax laws. For instance, the trump tax plan may require that they either increase or decrease their withholdings. Be sure you look over the latest W-4 forms every year for changes you and your employees need to be aware of. While it’s ultimately your employees’ jobs to perform a “paycheck checkup,” they’re sure to appreciate you telling them of any new tax laws that may impact how much they should have withheld from their checks to better ensure they don’t owe the IRS money. The less stress they’re under, no matter the source of that stress, the better they’re likely to perform at work.

Be Sure W-4 Forms Are Complete

Once an employee submits her or his W-4 form, look over it to make sure it is fully completed. Those who don’t finish their forms should not start work, for the best interest of everyone involved. Something else to be aware of is the fact that it’s not the employer’s responsibility to ensure the information on a W-4 form is correct. If the details aren’t accurate or up-to-date, it’s not you who could get into trouble. Your responsibility is to provide employees with all the information they need to make the best decision, make sure all forms are completely filled out and send them off.

Withholdings May Need Adjusting

Even after a W-4 form has been fully filled out and submitted and an employee has worked for you for several years, she or he can adjust withholdings by completing a new form. For instance, if an employee gets married or divorced or has a baby, that life event may require a change to withholdings.

Help your employees help themselves get the money they’re owed without owing the IRS. While a W-4 form may be a piece of paper, it can bring just as much peace as it does frustration.